Even with Gov. John Hickenlooper selling it in person, a proposal to privatize Pinnacol Assurance – the state-chartered worker’s compensation insurance fund – got a cool reception today from a special panel looking at the deal.

The Pinnacol Assurance Stakeholders Task Force didn’t take an official vote on the proposal, but a straw poll of the panel members present, a group representing business associations, labor unions, non-profits and civic leaders, showed more than half to be either opposed or neutral. And many of those on the panel of two dozen members qualified their neutral stance with serious concerns about the proposal.

Hickenlooper, a Democrat, has been pushing hard on the privatization deal, which would turn Pinnacol, now a quasi-governmental entity that is a poltical subdivision of the state, into a mutual assurance company with the option to become a common stock company.

The original proposal from Pinnacol called for the state to receive an ownership stake worth 40 percent, with a $340 million face value, of what would be the new mutual assurance company.

The initial deal would pay the state $13.6 million a year in dividends, money that could be used for college scholarships and economic development.

Hickenlooper is now recommending the state’s share be increased to $350 million and that a $22 million injured-workers fund be created. That fund would be paid over 20 years with annual payments of $1.1 million.

At today’s meeting, he compared Pinnacol’s partly public/partly private status to a tomato, which he said was “not really a fruit, not really a vegetable.”

The governor and Pinnacol argue the privatization deal would make it clear policy holders own Pinnacol’s assets. Lawmakers in 2009 considered, but then abandoned, taking $500 million from Pinnacol’s surplus to help balance the budget.

But Tony Gagliardi, state director of the National Federation of Independent Businesses, spoke for many small employers who are policy holders when he said there were too many unanswered questions about the proposal. Like others on the panel, he questioned whether the deal was even true privatization.

“Let’s just take a timeout to make sure everything is in order and we aren’t doing any harm,” Gagliardi said, arguing for slowing down the pace of the proposal.

“The notion that we can maintain premiums while adding tax obligations and additional competition…flies in the face of economics,” Elliott said.

Some policy holders and business groups have complained about overly aggressive tactics by Pinnacol in pushing the privatization deal. First, Pinnacol angered a number of business groups by running ads in favor of privatization – something the groups said violated an agreement not to lobby on the topic.

But some have complained Pinnacol now is trying to shove the deal down its customers’ throats, pointing to teleconference surveys that give policy holders the option of either supporting privatization or seeking more information on the proposal. Opposing it isn’t one of the push-button options.

Phil Hayes, political director for the Colorado AFL-CIO, said his organization couldn’t support the deal without a discussion of reforms to worker’s compensation laws. He said there’d been no cost-of-living adjustment for monetary awards to injured workers in 13 years.

Hayes also said that while injured workers who don’t follow safety procedures at work are penalized, employers who knowingly operate unsafe worksites aren’t similarly penalized.

But Berry said any substantive change to worker’s compensation laws would be a “clear stopper” to his organization’s support for the deal.

Hickenlooper sat quietly during the meeting as panel members mostly voiced concerns or criticism. He later told task force members that while many believed the status quo worked well, there was no guarantee things would stay the same over time.

“Clearly there are a great many perspectives, different interests that are in conflict,” the governor said later.

Does the proposal go back to the drawing board now?

“We never left the drawing board,” Hickenlooper said. “The drawing board is in my hand as we speak.”

It is heartening to see a democrat governor endorse the concept of privatizing government employees. It can save the state and municipalities millions.

Anonymous

This looks like the sharks and gators just thrashing about to get their teeth into a large amount of cash under the guise of “privatization”. I still want to know why people think it would be a great deal. Show us one or two real examples where “the workers and the people” win instead of executives and politicians. All I see are cash distributions to the state, executives and ownership to “someone”. This could be a real Colorado Rocky Mountain horror picture show.

Davidjohnson813

C’mon BD, Hick and his Democrats are not “sharks and gators”. The state needs to stop irresponsible spending and privatizing Pinnacol is a good place to start. After that Hick and his gang can privatize other government provided services. With proper management, such moves should lead to debt reduction and lower taxes.

Juste Milieu

“Hickenlooper sat quietly during the meeting as panel members mostly voiced concerns or criticism. He later told task force members that while many believed the status quo worked well, THERE WAS NO GUARANTEE THINGS WOULD STAY THE SAME OVER TIME.” To paraphrase Mark Haines (deceased) one time of CNBC, except for things GOVERNED by the laws of physics, it is the nature of life that we CANNOT GUARANTEE THINGS WILL STAY THE SAME. Can the GOVERNOR guarantee that the proposed privatization will have the desired result? NO…weak argument GOVERNOR. Perhaps the drawing board should be wiped clean and started over by people who understand the nature of life.

Lynn Bartels thinks politics is like sports but without the big salaries and protective cups. The Washington Post's "The Fix" blog has named her one of Colorado's best political reporters and tweeters.

Joey Bunch has been a reporter for 28 years, including the last 12 at The Denver Post. For various newspapers he has covered the environment, water issues, politics, civil rights, sports and the casino industry.